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2018 (12) TMI 929 - AT - Central ExciseCENVAT Credit - input services - services received by appellant from their authorized service stations with regard to free after sale services and repairs etc. of warranty period - Held that - The matter is no longer res-integra as this Tribunal in the case of Carrier Airconditioning & Refrigeration Ltd. vs. CCE, Gurgaon 2016 (3) TMI 124 - CESTAT NEW DELHI has already held that services provided by the authorized representative/ service stations are on behalf of the manufacturer and the service tax paid on availment of such services by the manufacturer, they are entitled for Cenvat credit of such input services. Thus, since the value of free after sale services and the warranty period repairs and maintenance are already included in the assessable value of the two wheelers, the service tax paid on availment of such input services by the manufacturer from their authorized representatives the appellant/assessee is entitled for credit of such input services. CENVAT Credit - input services - service tax paid on the commission for procuring the advertisement services - Held that - The activity of hiring of print media agent for ultimate purpose of advertising is very much part of advertising service and since the advertisement charges forms the part of assessable value of the appellants finished product any cost incurred and services availed in this regard form the part of assessable value and thus the appellant is entitled for credit of such input services - the appellant are legally entitled to avail input service credit of the service tax paid by them on the commission charged by the print media agent for advertising their advertisement material into various newspapers. CENVAT Credit - input services - renting of infrastructural facilities from M/s Honda Siel Car Pvt. Ltd. - Held that - Common facilities availed by the appellant on rent basis are in relation to the manufacture of goods‟ and then on integral part of overall activity of manufacturing - also since the charges of rent/license fee paid by the appellant must have been included in the cost of the finished product manufactured by the appellant as per the provisions of Cenvat Credit Rules they are entitled for credit of service tax paid by them as the facilities were in relation to manufacturing of their finished product - the appellant has rightly availed Cenvat credit of service tax paid on rent of infrastructural facilities. Extended period of limitation - Held that - Since all the material facts have always been available with the Department and the appellant have been audited by the Department on the regular intervals during the period of demand, the necessary element for invoking the extended time period of 5 years for demanding reversal of the Cenvat credit are not available in the present case - demand is barred by period of limitation. The penalties imposed under Rule 26 of the Cenvat Credit Rules on the appellants who are paid employees of the main appellant is not warranted. Appeal allowed - decided in favor of appellant.
Issues Involved:
1. Denial of Cenvat credit on after-sale service and warranty services. 2. Denial of Cenvat credit on service tax paid on renting of common civil infrastructure services. 3. Denial of Cenvat credit on service tax paid on commission to print media agents. 4. Invocation of the extended period of limitation for the demand. 5. Imposition of personal penalties on the employees of the appellant. Issue-wise Detailed Analysis: 1. Denial of Cenvat Credit on After-Sale Service and Warranty Services: The appellant argued that the repair and maintenance services received from authorized service stations should be eligible for Cenvat credit. The Tribunal noted that the free after-sale service coupons and warranty services are part of the assessable value of the motorcycles and scooters. The Tribunal referred to the case of Carrier Airconditioning & Refrigeration Ltd. vs. CCE, Gurgaon, which held that services provided by authorized service stations are on behalf of the manufacturer, and the service tax paid on such services is eligible for Cenvat credit. Consequently, the Tribunal concluded that the appellant is entitled to avail Cenvat credit on these services. 2. Denial of Cenvat Credit on Service Tax Paid on Renting of Common Civil Infrastructure Services: The appellant contended that the common infrastructural facilities such as roads, water supply, and boundary walls are essential for manufacturing activities. The Tribunal agreed that these facilities are integral to the manufacturing process and are covered under the "inclusive" clause of the definition of "input service." The Tribunal also noted that the services availed by the appellant are not under the exclusion clause of Rule 2(l)(A) of the Cenvat Credit Rules. The Tribunal relied on the decision in CCE, Raigad vs. Heidelberg Cement India Ltd., which allowed credit on such services. Therefore, the Tribunal held that the appellant is entitled to Cenvat credit on the service tax paid for renting these infrastructural facilities. 3. Denial of Cenvat Credit on Service Tax Paid on Commission to Print Media Agents: The appellant argued that the commission paid to print media agents for advertising services should be eligible for Cenvat credit. The Tribunal examined the invoices and noted that the commission paid to the agents is for the service of booking advertisements, and the service tax is charged on this commission. The Tribunal referred to the case of Indian Oil Corporation Ltd. vs. CCE, Mumbai, which held that the service tax paid on advertising services is eligible for Cenvat credit. The Tribunal concluded that the appellant is entitled to avail Cenvat credit on the service tax paid on the commission to print media agents. 4. Invocation of the Extended Period of Limitation for the Demand: The appellant contended that the demand is barred by the extended period of limitation as there was no suppression, fraud, collusion, or misrepresentation. The Tribunal noted that all material facts were available with the Department, and the appellant was regularly audited. The Tribunal concluded that the necessary elements for invoking the extended period of limitation were not present in this case. Therefore, the demand is barred by the period of limitation. 5. Imposition of Personal Penalties on the Employees of the Appellant: The appellant argued that the imposition of personal penalties on the employees under Rule 26 of the Central Excise Rules, 2002, was not warranted. The Tribunal held that since the demand itself is not sustainable, the grounds for imposing personal penalties are non-existent. Therefore, the penalties imposed on the employees were set aside. Conclusion: The Tribunal allowed the appeals on all counts, setting aside the order-in-original. It held that the appellant is entitled to avail Cenvat credit on after-sale service and warranty services, renting of common civil infrastructure services, and commission to print media agents. The demand was also barred by the period of limitation, and the imposition of personal penalties on the employees was not warranted. (Order pronounced in open court on 13/12/2018.)
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